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New financing options adopted to provide 24x7 tap water supply in Pune

Increasing population and urbanisation has put great pressure on existing resources, including water. The distribution of water still remains highly uneven across the country. This can be blamed partly on the overexploitation of water along with lack of strict penalties on its wastage by industrial and commercial consumers. However, another major reason for lack of access to water is inadequate water infrastructure. Over the past few years, a number of government programmes such as the Atal Mission for Rejuvenation and Urban Transformation (AMRUT) and the Smart Cities Mission have been successful in bridging the water infrastructure gap, aiming to provide uninterrupted water supply to citizens. The centre’s flagship programme, the JalJeevan Mission was launched in August 2019 with the aim of providing functional household tap connections to each and every rural household by 2024. Further, various urban local bodies have also taken up projects to improve water supply and repair worn-out pipeline infrastructure in their respective areas. These projects are being supported by multilateral agencies such as the Asian Development Bank and the World Bank. One such project that aims to ensure safe and equitable water supply is the ambitious 24×7 water supply project in Pune, Maharashtra. The Pune Municipal Corporation (PMC) has taken up the project to provide sustainable water supply services to all citizens for the next 30 years.

Key features

The project aims to introduce universal smart metering of water utilisation in the city and levy water charges based on the actual water consumption by consumers. Under the project, PMC plans to conduct water audits by installing bulk flow meters to monitor consumption patterns. It is implementing a supervisory control and data acquisition (SCADA) system to control operations effectively, monitor water quality and provide first-class service to consumers. It is also undertaking systematic leakage detection and repair activity to bring down the level of non-revenue water (NRW) in the distribution system to the desired level of 15 per cent. Other key features of the project include the deployment of geographic information system-based technologies to collect real-time data on water services and actively engage with citizens through various platforms.

Project details

The current cost of Pune’s 24×7 water supply project stands at about Rs 29 billion after revisions by PMC’s Estimate Committee. The scope of work involves the construction of reservoirs and pumping stations, shifting of utilities, laying of 1,700 km of transmission and distribution pipelines, and installation of water meters under the Smart Meter National Programme with the aim of conserving water and reducing water leakage at every step. Under the smart metering component, PMC will conduct a water audit, and undertake systematic leakage detection and repairs to bring down the level of NRW in the distribution system to 15 per cent. Besides, the project involves the installation of around 315,000 battery-operated water meters for domestic and non-domestic consumers followed by 10 years of operations and maintenance (O&M). The project aims to provide 750 litres of water per day to households. Further, it also involves the construction of 103 reservoirs. An additional component for laying a separate duct for optic fibre cables along with a water pipeline network was later added to the scope of work, which escalated the cost of the project to Rs 33 billion. The Maharashtra government had also included the construction of 63 elevated storage reservoirs and 19 ground storage reservoirs as part of the project under AMRUT for the year 2017-18.

Innovative funding

To fund its ambitious project, PMC raised Rs 2 billion through municipal bonds in June 2017 as Tranche I of the fundraising programme. The issue, handled by SBI Capital Markets, was oversubscribed six times and received subscriptions worth Rs 12 billion. Pune’s municipal bonds were rated AA+, one of the top ratings given. The bonds have been issued to domestic insurers, pension funds and large state-owned banks and carry an interest rate of 7.59 per cent.

The civic body had plans to raise another Rs 2 billion for the project in 2020. However, the Covid-19 outbreak is expected to delay the issuance of bonds as India remains one of the worst affected countries with the number of cases increasing exponentially. In the first quarter of 2020-21, the Indian economy shrank by 23.9 per cent due to the pandemic.

Current status

PMC has awarded contracts to two firms – Larsen & Toubro Limited and Jain Irrigation Systems Limited – to carry out the work of laying water pipelines and installing meters at a cumulative cost of about Rs 23.07 billion. The scope of work involves the study, survey, investigation, assessment, design validation and revamping of the entire water supply network in the city including NRW reduction, SCADA system deployment and O&M of the water treatment plant.

Currently, about 10 per cent of the civil work has been completed, which involves the laying of about 200 km (out of 1,700 km) of pipelines and installation of about 10,000 water meters. The work was earlier expected to be completed by 2021 but is behind schedule. Most of the water meters that have been installed are for bulk consumers, and commercial and industrial establishments. Other consumers still remain excluded as very few residences have a metering system in place. About 30 per cent of the water supplied to the city is metered, far below the target set under the project. Issues have been faced on several fronts. Key among these is the difficulty in acquiring permission to dig concrete roads to lay pipelines. Besides, there has been trouble with the old water meters installed in the city due to poor meter quality and delays in repair services.

PMC is now expanding the project to cover 11 villages in the first phase and 23 villages in the future. On March 9, 2020, it invited request for proposal bids for selection of a project management consultant. Following this, seven firms – BLG Construction Services Private Limited, DRA Consultants Limited, L.N. Malviya Infra Project Private Limited, Shah Technical Consultants Private Limited, National Projects Construction Corporation Limited, Tata Consulting Engineers Limited and WAPCOS Limited – have submitted their bids. The 11 newly merged villages are UruliDevachi, Phursungi, BavdhanBudruk, Lohegaon, Hadapsar, Mundhwa, Shivane, Dhayari,  Undri, Ambegaon Khurda and Ambegaon Budruk.

The way forward

Challenges with respect to water availability are increasingly impacting cities across the country. In a bid to address these issues and ensure uninterrupted water supply, robust water infrastructure with innovative, smart solutions is critical. The government needs to focus on equipping utilities with financial and technical know-how to ensure timely completion of water supply and infrastructure projects. The lockdown to contain the spread of Covid-19 has impacted ongoing projects, resulting in time and cost overruns. There have been supply chain disruptions, and shortages of raw material and labour. However, construction works are now picking up pace. Work on Pune’s 24×7 water supply project was affected mainly due to large-scale migration of workers to their native places in April 2020. However, with labour returning to the sites, work is expected to pick up pace. The deployment of advanced technologies and systems to fast-track project implementation while adhering to physical distancing norms has become more important than ever. It is critical for implementing agencies to communicate proactively with customers to serve them better. This can be done by developing multiple communication channels and is imperative for future growth and improvement in service provisioning.

Garima Nain

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